Treasuries Move Lower Ahead Of Powell's Jackson Hole Speech

After showing a lack of direction early in the session, treasuries moved moderately lower over the course of the trading day on Thursday.

Bond prices bounced back and forth across the unchanged line in morning trading before spending the afternoon lingering in negative territory.

Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.7 basis points to 4.235 percent.

The ten-year yield regained ground after moving sharply lower over the two previous sessions but remains well off its recent nearly sixteen-year highs.

The modes weakness among treasuries came as traders expressed continued concerns about the outlook for interest rates ahead of the economic symposium in Jackson Hole, Wyoming.

The symposium will feature meetings by global central bank leaders as well as a speech by Federal Reserve Chair Jerome Powell on Friday.

“The U.S. consumer is too resilient, the labor market still too tight and inflation is still too hot for comfort,” Danni Hewson, head of financial analysis at AJ Bell. “Amid that backdrop investors are waiting to hear the tone struck by the Fed chair at Jackson Hole, which could deliver a crucial insight into exactly where rates will be headed in the next few months.”

On the U.S. economic front, the Commerce Department released a report showing new orders for U.S. manufactured durable goods tumbled by more than expected in the month of July.

The Commerce Department said durable goods orders plunged by 5.2 percent in July after surging by a revised 4.4 percent in June.

Economists had expected durable goods orders to slump by 4.0 percent compared to the 4.6 percent jump that had been reported for the previous month.

Excluding a pullback in orders for transportation equipment, durable goods orders rose by 0.5 percent in July after inching up by 0.2 percent in June. Ex-transportation orders were expected to edge up by 0.2 percent.

Meanwhile, the Labor Department released a report unexpectedly showing a modest decrease in first-time claims for U.S. unemployment benefits in the week ended August 19th.

The report said initial jobless claims slipped to 230,000, a decrease of 10,000 from the previous week’s revised level of 240,000.

Economists had expected jobless claims to inch up to 240,000 from the 239,000 originally reported for the previous week.

Trading on Friday is likely to be driven by reaction to Fed Chair Powell’s speech and its impact on the outlook for interest rates.

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